Steve Fielding (Victoria, Family First Party) Share this | Hansard source

Family First have expressed concern about the Tax Laws Amendment (Medicare Levy Surcharge Thresholds) Bill (No. 2) 2008 and the extra costs it will transfer to lower income families and earners because it will mean that health insurance premiums will increase. But, at this time of economic uncertainty and the massive global downturn, it is paramount that Australia’s economic security is the focus of any decision making by parliament. Family First believe this is the time for shoring up the economy and for the parliament to work to ensure a strong and stable economy. Family First will be supporting this bill.

Around 330,000 people will get a tax cut from the Medicare levy surcharge threshold changes, which is good, but Family First remain concerned that millions of ordinary Australians will end up paying more for their health insurance. Last month, I voted against this bill because it would slug lower income earners. We know that health premiums will rise if this bill is passed, due to the increased thresholds. That means lower income families, who are already struggling to pay health insurance and who will not get a tax cut, will be unfairly hit with higher health premiums. That is why Family First wanted the government to provide compensation for lower income families. More than 1.5 million households earning less than $50,000 a year pay for health insurance, which is as many as 2.3 million. These people bought health insurance because they need it. They make sacrifices to keep that insurance. Many pensioners have had health insurance all their lives but now when they really need it they will struggle to afford it. The changes could see some families paying an extra $200 a year for health insurance, which is money many would have difficulty finding. Professor Deeble told the Senate Standing Committee on Economics inquiry the average increase will be around $70 a year. This will mean a significant increase in costs for many people in the community.

Over the past couple of weeks we have seen the world financial crisis worsen. Overseas we have seen banks collapse and governments in the United States and Europe move quickly to spend billions of US dollars and euros to save failing financial institutions. The potential losses for families and lower income earners from difficulties in the financial system are much higher than those they face from increased health insurance costs. That is why Family First announced earlier this week that we would support this bill. Family First believe that confidence is very important to the Australian people and to the financial markets in times of crisis and that uncertainty over the government’s budget could be destabilising. Therefore, Family First believe that at this time of economic uncertainty and global economic turmoil the government should be able to pass the remaining two budget bills to provide the government’s budget with certainty. This week, one day after Family First decided to support the remaining two budget bills, the government announced the $10.4 billion Economic Security Strategy to strengthen the economy, to try to avoid some of the financial problems we have seen overseas.

Supporting this bill was not an easy decision. It is a decision that has to balance the increased health insurance costs facing many people against providing security for the government’s budget package to help shore up the economy during this financial crisis. Family First believe the financial crisis has the potential to cost Australians much more than the increase in health insurance premiums. Family First believe it has got the right balance. Family First have not forgotten those people who face high health insurance premiums, but believe they would be worse off if the government did not have the support for its budget package to help shore up the economy.